Destructoid is reporting that Microsoft has been granted a patent for a process to "censor audio streams real-time." To dissect this a bit, it seems soon Microsoft will have the technology to permanently mute you on Xbox Live or censor what you are saying possibly using a list of unacceptable words if you are making racist comments or talking a bit too much trash.
This could be a great idea if they use it right. a line would have to be drawn where racist comments and just plain curse words are differentiated. Unless MS just wants to censor all words that could be deemed offensive. They could possibly use gamerzone to do this, censoring all bad words in the family zone, but allowing a bit more freedom in the underground zone.
Arstechnica has a bit of information from as well, albeit a bit technical:
"The automatic censoring filter employs a lattice comprising either phonemes and/or words derived from phonemes for comparison against corresponding phonemes or words included in undesired speech data. If the probability that a phoneme or word in the input audio data stream matches a corresponding phoneme or word in the undesired speech data is greater than a probability threshold, the input audio data stream is altered so that the undesired word or a phrase comprising a plurality of such words is unintelligible or inaudible. The censored speech can either be stored or made available to an audience in real-time."
More on this as it develops.